Improve Cibil Score from 500 to 750 : When it comes to credit score, we all want it high. After all who wants to get rejected to buy their dream house or dream car, or just possessing a credit card to use during tough financial times? However, what many people fail to realize is that one needs to maintain a good credit history to be eligible for any kind of secured or unsecured loans. CIBIL (Credit Information Bureau of India Ltd.) keeps a track of all your transactions and gives a CIBIL score based on your credit history. This CIBIL score is the key factor which banks take into consideration while issuing you a loan or credit card. Your CIBIL Score can get low due to non payment, late payment of EMIs or credit card bills; cheque bounces as well as failure to maintain minimum account balance in your savings accounts. Fortunately, there are ways to improve CIBIL score. In this post we will let you know 5 simple but imperative steps to improve low CIBIL score.
How to Improve Cibil Score from 500 to 750 ?
For people with a sense of financial discipline, a good CIBIL score comes automatically. However, people who have not had a proper method of spending or investing money wonder, can I improve my CIBIL score? It is advisable to check your CIBIL score. To do that, logon to www.cibil.com and fill the online application form You will have to make a payment of Rs 470 by net banking or credit card. You should get your credit report in a few hours mailed to you. Do check your SPAM folder as well as sometimes the mail gets filtered to the SPAM folder. Check properly if your name, age, date of birth, PAN numbers are correct. Also, check for the accounts held and loans under your name. If you find any discrepancies, report to CIBIL immediately, as it could bring down your credit score. In case your CIBIL score is less than 750, you need to work upon your financial transactions. You will get some useful tips to improve CIBIL score in this article.
Recommended Read : How to Check Cibil Score for Free ?
1) Manage your Credit Cards well
One needs to ensure that he or she is not holding more than two credit cards. Some people like to flaunt their cards. They want their wallets full of cards. This shows that they are credit hungry. Banks consider this as a negative point when that person applies for a loan. So, if you have more than two credit cards, close them. Make more use of your Debit cards. Maintain a healthy balance in your saving bank account and use it wisely.
2) Make Payments on Time every Time
Make payments of your credit card and utility bills on time. Especially in case of a credit card, make the payment before the due date. Not paying on time not only makes you pay late fees but also impacts your credit score. Even utility bills, like phone bills, should be paid on time. If you have had a bad history, and know how to improve a CIBIL score, you can start making payments on time from now. This will improve bad CIBIL score. Banks will consider recent on time payments and chances of you getting a loan would increase.
3) Pay your Dues in Full
It looks very nice to see that the minimum amount due is much less than the actual amount you owe to bank. People can get tempted to pay just the minimum amount due. However, the remaining balance will be considered as unpaid outstanding balance. This not only affects your credit score negatively but banks also charge heavy interest on this amount.
4) Try to Maintain a good Credit Mix
It is always better to have a mix of secured ( home loan, auto loan) and unsecured loans ( personal loan, credit card). If you credit history is more inclined towards just unsecured loans, banks and money lenders will consider it a negative point. Having a mix of secured and unsecured loan and paying the EMIs on time will help you improve bad CIBIL report.
5) Do not Use your Entire Credit
It is recommended to use just 30% of your credit limit in a month. So, for example, you have a credit limit of 1 lac on your credit card. Make sure you do not use more than Rs 30,000 by your credit card. Even if you might have utilized more than this recommended limit in the past, start afresh and follow this rule to improve credit score in India.
One question many people have is how to improve CIBIL score after cheque bounce. The simple answer is not to repeat it again. Ensure that all your issued cheques get cleared and there are no further cheque bounce cases.
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